Chevron

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said it will spend about $300 million to buy a 5% stake in Reliance Petroleum, a company formed by Reliance Industries to own and operate a new export refinery being constructed in Jamnagar, India.

Reliance Petroleum plans to develop a refinery with the capacity to handle 580,000 barrels of crude a day. The refinery is expected to begin operating in December 2008. Chevron, based in San Ramon, Calif., has future rights to increase its equity ownership to 29%.

"We are very pleased to have forged this relationship with Reliance, one of India's leading companies, which has excelled in the execution of world-class projects. This underscores the importance of Asia to Chevron generally, and India specifically. I look forward to working with Reliance in the development of the new refinery and jointly pursuing additional opportunities," said Chevron chairman and CEO Dave O'Reilly.

Reliance currently operates a refinery with the capacity for 650,000 barrels a day in Jamnagar. The new refinery is designed to have a similar throughput capacity, but will likely process heavier crude oil. The new refinery would be the world's sixth-largest refinery on a single site, and the two together would constitute the biggest refinery complex in the world, based on current capacities.

Shares of Chevron were losing 86 cents, or 1.5%, to $58.60.